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Suppose that the price of labor equals w and the price of capital equals r. Derive expressions for the input demand curves.
Currently, the firm employs 80 workers per day. What is the firm's daily total cost if it rents just enough capital to produce at its target?
Suppose computer time costs $5 per hour and clerical time costs $7.50 per hour. What are the cost-minimizing choices of L and K?
Find the cost-minimizing combination of labor and capital if the manufacturer wants to produce 121,000 airframes.
Why could these expansion paths ever cross each other at a point other than the origin (L = 0, K = 0)?
Suppose only the cost of labor goes up by 5 percent. What happens to the cost-minimizing quantity of labor and capital in the short run.
A firm uses two inputs, capital and labor, to produce output. What will happen to the cost-minimizing input quantities for a given output level?
Write down a production function with labor. Sketch isoquant that shows combinations of skilled and unskilled labor that result in building 100 yards of wall.
What is the difference between average product and marginal product? Can you sketch a total product function such that average and marginal product function?
Would you expect the compensating variation and the equivalent variation resulting from the price decrease to be near $30? Explain.
Draw a set of indifference curves that would make it optimal for him to work 4 hours of overtime each day.
Discuss the various disciplines that contribute to Organisation Behaviour, outlining how these contributions are reflected in an organisation's life circle.
If George spends $5 a week on good X and good Y and if price of each good is $1 per unit, then how many units of each good does he purchase to maximize utility?
Determine the equilibrium price and quantity. Compute the elasticities for each independent variable. Note: Write down all of your calculations.
Why would the value of the income elasticity of demand for x be different if Ann always spends 60 percent of her income on good x?
If the demand for a product is perfectly price inelastic, what does the corresponding price consumption curve look like?
If not, under what circumstances might the demand curve have an upward slope over some region of prices?
If indifference curves are bowed in toward the origin and the price of a good drops, can the substitution effect ever lead to less consumption of the good?
What is a price consumption curve for a good? How does a price consumption curve differ from an income consumption curve?
Draw a graph illustrating Angela's budget line and optimal basket when she joins no club, the budget line she would have faced had she joined the Premium Club.
What can be said about the cross-price elasticity of demand of food with respect to the price of clothing?
Illustrate the income and substitution effects of the price change on the consumption of food. Do so for each of the given cases.
What must always be true about Reggie's income and substitution effects as the result of a change in the price of shelter?
Define a luxury good as a good for which the income elasticity of demand is greater than 1. Suppose that a consumer purchases only two goods.
On an optimal choice diagram (with budget lines and indifference curves), illustrate this pattern of consumption.